Could impeachment spark China deal?
Pact with Canada and Mexico also on the line
Paul Wiseman and Joe Mcdonald
WASHINGTON – The Democratic impeachment inquiry may do at least one thing for President Donald Trump: It could give him more incentive to resolve his trade war with China.
As the political heat rises in Washington, a deal with Beijing would allow Trump to claim a much-needed victory and divert some attention from an explosive congressional investigation into his dealings with Ukraine.
Analysts say Trump’s conflict with Beijing, which has shaken financial markets and further darkened the global economic outlook, could be headed for some tentative resolution in the coming months. Talks between the two countries are set to resume in October.
“The political mess may now encourage President Trump to accept an imperfect deal with China,” Hussein Sayed of the foreign exchange brokerage FXTM wrote in a report. “After all, he needs to prove that he’s the master of deal-making, and now is the right time to raise his approval rating higher.”
At the same time, however, the impeachment inquiry may have dimmed the prospects for other items on Trump’s trade agenda, including his push for congressional approval of a revamped North American trade agreement. That would require backing from the Democratic-led House, and relations between the two parties may now be more inflamed than ever.
The impeachment proceedings will likely dominate Washington for months, siphoning time and energy from the normal business of government – debating, compromising, legislating, policymaking. The likelihood of meaningful legislative gains was already slight. Now it appears even more remote.
White House press secretary Stephanie Grisham went so far as to assert that the House Democrats’ investigation “destroyed any chances of legislative progress for the people of this country.”
By contrast, a tentative resolution in Trump’s China trade war wouldn’t need congressional approval, one reason for some renewed optimism.
The world’s two biggest economies are engaged in the biggest trade war since the 1930s. The Trump administration alleges that Beijing deploys predatory tactics – including stealing technology and forcing foreign companies to hand over trade secrets – in its drive to surpass America’s technological supremacy.
Trump has imposed tariffs on more than $360 billion in Chinese imports and is set to raise the taxes on most of them next month. He plans to tax an additional $160 billion in Chinese goods Dec. 15 – thereby extending his tariffs to just about everything China ships to the United States. Beijing has retaliated by taxing $120 billion in U.S. imports.
The U.S. business community is eager for an end to the exchange of tariffs, which has raised costs and created uncertainty about where to situate factories, hire suppliers and sell products.
Even before members of Congress began pursuing an impeachment investigation, Chinese leaders were speculating Trump might want a deal to bolster his political standing, said Willy Lam, a politics specialist at the Chinese University of Hong Kong.